1. Israel’s credit rating has been reaffirmed at A+ by “Standard and Poor,” at a time when S&P lowers the credit rating of an increasing number of Western countries. According to S&P:
the Israeli economy continues to generate solid economic growth and enjoy a net external asset position, even though the current account has temporarily turned negative. The stable outlook reflects our view that there is sufficient political will to prevent a sizable increase in the government’s debt burden, and that major security risks will be contained.
S&P noted that “there has been fiscal slippage on account of lower government revenues,” but added, “recent austerity measures and current growth levels should ensure that debt ratios modestly improve in the medium term.”
Referring to the most important economic development in Israel in recent times, the discovery of large offshore gas reserves, S&P said, “We forecast that by the middle of the decade domestic natural gas production should contribute to improved external and fiscal balances” (Globes Business Daily, September 30, 2012).
2. Israel’s GDP grew by 3.4% during the 2nd quarter of 2012, compared with 3.1% and 3.2% during the 1st quarter of 2012 and the 4th quarter of 2011 (Globes, Sept. 20) . While unemployment trends upward towards 7% – which is significantly lower than OECD countries – housing demand peaked in August, to a 13 year record (Globes, Sept. 28).
Israel’s export is impacted by the global meltdown in general and Europe’s intensified economic crisis in particular. However, while export to Europe declined by 21% during July-August, 2012, compared with July-August, 2011, export to the U.S. surged by 16% during the same period and by 31% compared with May-June, 2012. Total export ($7.7BN) decreased by 3.5% during July-August, 2012 (Israel Hayom, Oct. 3).
3. According to the 2012 OECD report, Education at Glance, Israel is ranked 2nd in the number of adults (25-64 year old) with academic degrees, trailing Canada, but ahead of all other OECD countries (Israel Hayom, Sept. 12).
4. eBay CEO John Donahoe at Israel’s Advanced Technology Conference in Jerusalem (Bloomberg, Sept. 11): the Israel R&D centers of eBay and its subsidiary PayPal will continue to help drive the company’s innovation in commerce and payment in the foreseeable future. Those centers are based largely on Israeli start-ups acquired by eBay, including Shopping.Com, The Gifts Project and Fraud Sciences. Those centers, employing 340 people, work on everything from EBay’s global social activities to cataloging and data to search mechanisms as well as security and risk management. Donahoe is looking forward to partnering with more Israeli entrepreneurs to help further spur the future of retail and commerce.
5. Cisco Systems, the Silicon Valley-based Greylock Partners and the Englewood, CO-based Liberty Global participated in the $24MN 5th round of private placement by Israel’s Celeno (Globes, Sept. 28).
Kazakhstan’s Kenges Rakishev invested $20MN in Israel’s Mobli. Additional investors in Mobli are Leonardo DiCaprio, Tobey McGuire and Serena Williams.
In August, Rakishev invested $5MN in Israel’s TriPlay (Globes, September 20). The Radnor, PA-based New Spring Capital, the Menlo Park, CA-based Menlo Ventures and the Palo Alto, CA-based Trident Capital participated in a $12MN 3rd round by Israel’s eXelate (Globes, Sept. 25). Switzerland’s ABB will invest $10MN in an Israeli solar project (Globes, Sept. 3). Motorola Solutions led a $4MN round by Israel’s AgentVi (Globes, Sept. 12).
Visit the Ettinger Report.Yoram Ettinger
About the Author: Ambassador (ret.) Yoram Ettinger is consultant to Israel’s Cabinet members and Israeli legislators, and lecturer in the U.S., Canada and Israel on Israel’s unique contributions to American interests, the foundations of U.S.-Israel relations, the Iranian threat, and Jewish-Arab issues.
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